Huntsville Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2023

Moderately Confident Forecasts from Metro Businesses

Huntsville’s ABCI grew 3.1 points to register at a moderately confident index of 55.1 in the Q3 2023 survey, signaling expectations for economic growth compared to the previous quarter. Five of the six component indexes increased this quarter, with only the hiring index decreasing by 0.6 points compared to Q2 2023. Metro business leaders are most optimistic about increased industry sales this quarter with a strongly positive index. Huntsville panelists are also moderately confident that industry hiring and sales will increase compared to Q2 2023. The only component index that is still negative is for the US economy, with a moderately negative outlook.

Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.

Huntsville Component Index Analysis

• Alabama Economy: The metro’s economic index for Alabama grew 2.7 points to reach a mildly positive 54.9 in the Q3 2023 survey, indicating continued expectations for improved statewide economic conditions.
• US Economy: The Q3 2023 US economy index was the only negative component index for Huntsville at a moderately negative 44.3. This is a 5.1-point increase from Q2 2023’s strongly negative outlook.
• Industry Sales: Business leaders are forecasting an increase in sales this quarter with a strongly confident index of 62.5. This is 3.3 points above last quarter’s index and is the metro’s highest component index for Q3 2023.
• Industry Profits: Huntsville’s outlook for industry profit is moderately positive this quarter at 56.4 after a 4.2-point increase from Q2 2023.
• Industry Hiring: Huntsville panelists are continuing to forecast increased hiring in Q3 2023 with an index of 57.6, which is only 0.6 points below last quarter’s index.
• Industry Capital Expenditures: The metro’s capital spending index gained 3.9 points to reach 54.5, indicating mildly confidence in the forecast for third quarter growth.

ABCI Huntsville in Context

This is the second consecutive quarter that Huntsville’s ABCI has been positive, indicating sustained expectations for growth. After briefly dipping below 50 in Q2 2020 when the pandemic was first declared a national emergency, Huntsville’s ABCI rebounded and was moderately or strongly positive for the next 2 years. In Q3 and Q4 2022, it fell closer to a neutral index, as panelists’ strongly negative forecast for the US economy contrasted with the positive outlook for the industry component indexes; and finally registered as mildly negative in Q1 2023 as confidence in the AL economy and industry profits also fell. Now, metro panelists are feeling more optimistic about the industry indexes as well as statewide economic conditions.

Business confidence across metros varied in the Q3 2023 survey. For the second consecutive quarter, Huntsville was the only metro with a positive ABCI and positive forecasts for all industry component indexes. Tuscaloosa’s ABCI was mildly negative with positive forecasts for hiring and the AL economy. Montgomery and Birmingham–Hoover followed next with mostly negative component indexes but expectations for capital expenditure growth. Mobile had the lowest ABCI this quarter at a moderately negative 43.0.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2023 ABCI™ survey. This is the 87th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the September 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the fourth quarter of 2023.

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This report was produced in partnership between the Center for Business and Economic Research at the The University of Alabama’s Culverhouse College of Business and the Huntsville Area Chamber of Commerce.

Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.